78th OREGON LEGISLATIVE ASSEMBLY Regular Session. Enrolled. House Bill 3396 CHAPTER... AN ACT

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1 78th OREGON LEGISLATIVE ASSEMBLY Regular Session Enrolled House Bill 3396 Sponsored by Representative NATHANSON, Senator BATES CHAPTER... AN ACT Relating to health care provider incentive programs; creating new provisions; amending ORS , and and section 25, chapter 913, Oregon Laws 2009; repealing ORS , , , , , , , , , , , and ; and prescribing an effective date. Whereas the State of Oregon spends approximately $30 million each year on various incentive programs for health care professionals; and Whereas the incentive programs are effective but it is unclear whether the programs produce the best results for the tax dollars spent on the programs; and Whereas taxpayers deserve to have confidence that their tax dollars are being spent in the most thoughtful way possible; and Whereas Oregonians and health care professionals in rural and medically underserved areas need assurances that critical health care programs will not be shut down without effective programs to replace them; and Whereas this 2015 Act is intended to initiate a close look at how tax dollars are spent to ensure that taxpayers enjoy the best value possible; and Whereas this 2015 Act is not intended to allow for incentive programs to be shut down before the programs can be retooled or replaced with more effective programs; now, therefore, Be It Enacted by the People of the State of Oregon: SECTION 1. The Health Care Provider Incentive Fund is established in the State Treasury, separate and distinct from the General Fund. Interest earned by the Health Care Provider Incentive Fund shall be credited to the fund. Moneys in the fund are continuously appropriated to the Oregon Health Authority to carry out section 2 of this 2015 Act. SECTION 2. (1) There is created in the Oregon Health Authority a health care provider incentive program for the purpose of assisting qualified health care providers who have committed to serving medical assistance recipients in rural or medically underserved areas of this state. The authority shall prescribe by rule: (a) Participant eligibility criteria, including the types of qualified health care providers who may participate in the program; (b) The terms and conditions of participation in the program, including the duration of the term of any service agreement; (c) The types of incentives that may be provided; (d) If the funds allocated to the program from the Health Care Provider Incentive Fund established under section 1 of this 2015 Act are insufficient to provide assistance to all of the Enrolled House Bill 3396 (HB 3396-C) Page 1

2 applicants who are eligible to participate in the program, the priority for the distribution of funds, based on guidance from the Health Care Workforce Committee; and (e) The financial penalties imposed on an individual who fails to comply with terms and conditions of participation. (2) The authority may enter into contracts with one or more public or private entities to administer the program or parts of the program. SECTION 3. (1) The Oregon Health Policy Board shall study and evaluate the effectiveness of financial incentives offered by the state to recruit and retain qualified health care providers in rural and medically underserved areas. (2) On the basis of the study, the board shall develop recommendations with respect to: (a) The continuation, restructuring, consolidation or repeal of the incentives; (b) The priority for distribution of incentive funds allocated to the program from the Health Care Provider Incentive Fund established under section 1 of this 2015 Act to qualified health care providers; and (c) New financial incentive programs. (3) The recommendations must address, but need not be limited to: (a) Financial assistance programs for students in both the publicly funded and private institutions in this state that provide post-graduate training in medical fields; (b) Loans, grants or other financial incentives to hospitals and teaching health centers for the purpose of establishing or expanding residency programs, including recommendations for the eligibility criteria, repayment provisions, interest rates and other requirements for financial incentives; (c) Low-interest loans, short-term emergency funding or grants for type A, B and C hospitals that are at risk of closure due to financial instability; (d) Direct subsidies or bonus payments to qualified health care providers for services provided in rural and medically underserved areas; (e) Creation of a retirement plan to offer to licensed or certified providers as an incentive to provide services in rural and medically underserved areas and to medically underserved populations in this state; (f) The criteria for tax credits, including adding means testing or time limits; (g) Opportunities that are available to secure private or public, local or federal matching funds; and (h) The definitions of rural area, medically underserved area and qualified health care provider. (4) In developing recommendations under this section, the Oregon Health Policy Board may consult with the Graduate Medical Education Consortium, the Oregon Healthcare Workforce Institute, the Office of Rural Health, the Oregon Center for Nursing or other appropriate entities. (5) The Oregon Health Policy Board may contract with a public or private entity to assist in the development of recommendations. (6) The Oregon Health Policy Board shall report on the progress in developing recommendations under this section to the interim committees of the Legislative Assembly related to health during the interim committee meetings in November 2015 and to the committees of the Legislative Assembly related to health during the 2016 regular session. The board shall report its final recommendations to the interim committees of the Legislative Assembly, in the manner prescribed by ORS , no later than September 1, SECTION 4. In addition to and not in lieu of any other appropriation, there is appropriated to the Oregon Health Authority, for the biennium beginning July 1, 2015, out of the General Fund, the amount of $180,000, which may be expended for carrying out section 3 of this 2015 Act. SECTION 5. ORS is amended to read: Enrolled House Bill 3396 (HB 3396-C) Page 2

3 (1) There is established in the State Treasury a fund, separate and distinct from the General Fund, to be known as the Oregon Student Assistance Fund for investment as provided by ORS to and for the payment of the expenses of the Higher Education Coordinating Commission in carrying out the purposes of ORS to , , to , and Interest earned by the fund shall be credited to the fund. (2) There is established in the State Treasury a fund, separate and distinct from the General Fund, to be known as the Alternative Student Loan Program Fund for investment as provided by ORS to and for the payment of expenses of the commission in carrying out the purposes of ORS to This fund, including the interest earnings on the fund, if any, is continuously appropriated to the commission for those purposes for which such funds were provided to, received or collected by the commission. [(3)(a) There is established in the General Fund an account to be known as the Nursing Services Account. Funds in the account shall be used for the payment of expenses of the Nursing Services Program created in ORS ] [(b) The account shall consist of:] [(A) Funds appropriated to the commission for deposit into the account;] [(B) Collections and penalties received by the Executive Director of the Office of Student Access and Completion under ORS ; and] [(C) Any donations or grants received by the commission for purposes of the Nursing Services Program.] [(c) Any funds in the account that are not expended in any biennium shall be retained in the account and may be expended in subsequent biennia.] [(4)] (3) There is established in the State Treasury a fund, separate and distinct from the General Fund, to be known as the Foster Youth Scholarship Fund. Moneys received from appropriations, donations and grants shall be credited to the fund. Moneys in the fund are continuously appropriated to the commission for the purposes of investment, as provided by ORS to , and for carrying out the provisions of ORS (1)(b). Interest earned by the fund shall be credited to the fund. [(5)] (4) There is established in the State Treasury a fund, separate and distinct from the General Fund, to be known as the ASPIRE Program Fund. Moneys received from donations and grants shall be credited to the ASPIRE Program Fund. Moneys in the fund are continuously appropriated to the commission for the purposes of investment, as provided by ORS to , and for carrying out the provisions of ORS Interest earned by the fund shall be credited to the fund. [(6)(a)] (5)(a) There is established in the State Treasury the Nursing Faculty Loan Repayment Fund, separate and distinct from the General Fund. Interest earned on the Nursing Faculty Loan Repayment Fund shall be credited to the fund. Moneys in the fund are continuously appropriated to the commission for carrying out ORS to The Nursing Faculty Loan Repayment Fund consists of: (A) Moneys appropriated to the commission for the Nursing Faculty Loan Repayment Program created in ORS ; and (B) Grants, gifts or donations received by the commission for the program. (b) Any unexpended funds in the fund at the end of a biennium shall be retained in the fund and may be expended in subsequent biennia. SECTION 6. ORS is amended to read: (1) A physician issued a license under ORS is subject to all the provisions of this chapter and to all the rules of the Oregon Medical Board. A physician issued a license under ORS has the same duties and responsibilities and is subject to the same penalties and sanctions as any other physician licensed under this chapter. (2) A physician issued a license under ORS may not: (a) Act as a dispensing physician as defined in ORS ; (b) Administer controlled substances for the treatment of intractable pain to a person located within this state; Enrolled House Bill 3396 (HB 3396-C) Page 3

4 (c) Employ a physician assistant as defined in ORS to treat a person located within this state; or [(d) Participate in the primary care provider loan repayment program created in ORS ; or] [(e)] (d) Assert a lien for services under ORS (3) A physician licensed under ORS shall comply with all patient confidentiality requirements of this state, except as those requirements are expressly prohibited by the law of any other state of the United States where a person s medical records are maintained. SECTION 7. Section 25, chapter 913, Oregon Laws 2009, as amended by section 10, chapter 750, Oregon Laws 2013, is amended to read: Sec. 25. (1) Except as provided in subsection (2) of this section, a credit may not be claimed under ORS for tax years beginning on or after January 1, [2016] (2) A taxpayer who meets the eligibility requirements in ORS for the tax year beginning on or after January 1, [2013] 2017, and before January 1, [2014] 2018, shall be allowed the credit under ORS for any tax year: (a) That begins on or before January 1, [2023] 2027; and (b) For which the taxpayer meets the eligibility requirements of ORS SECTION 7a. ORS , as amended by section 19, chapter, Oregon Laws 2015 (Enrolled House Bill 2171), is amended to read: (1) A resident or nonresident individual certified as eligible under ORS , licensed under ORS chapter 677, who is engaged in the practice of medicine, and who is engaged for at least 20 hours per week, averaged over the month, during the tax year in a rural practice, shall be allowed an annual credit against taxes otherwise due under ORS chapter 316. (2) The amount of credit allowed shall be based on the distance, in highway miles, from a major population center in a qualified metropolitan statistical area at which the taxpayer maintains a practice or hospital membership: (a) If at least 10 miles but fewer than 20 miles, $3,000. (b) If at least 20 miles but fewer than 50 miles, $4,000. (c) If 50 or more miles, $5,000. (3) The credit shall be allowed during the time in which the individual retains such practice and membership if the individual is actively practicing in and is a member of the medical staff of one of the following hospitals: (a) A type A hospital designated as such by the Office of Rural Health; (b) A type B hospital designated as such by the Office of Rural Health if the hospital is: (A) Not within the boundaries of a metropolitan statistical area; (B) Located 30 or more highway miles from the closest hospital within the major population center in a metropolitan statistical area; or [(B)] (C) Located in a county with a population of less than 75,000; (c) A type C rural hospital, if the Office of Rural Health makes the findings required by ORS ; (d) A rural hospital that was designated a rural referral center by the federal government before January 1, 1989, and that serves a community with a population of at least 14,000 but not more than 19,000; or (e) A rural critical access hospital. (4) In order to claim the credit allowed under this section, the individual must remain willing during the tax year to serve patients with Medicare coverage and patients receiving medical assistance in at least the same proportion to the individual s total number of patients as the Medicare and medical assistance populations represent of the total number of persons determined by the Office of Rural Health to be in need of care in the county served by the practice, not to exceed 20 percent Medicare patients or 15 percent medical assistance patients. (5) A nonresident individual shall be allowed the credit under this section in the proportion provided in ORS If a change in the status of a taxpayer from resident to nonresident or from Enrolled House Bill 3396 (HB 3396-C) Page 4

5 nonresident to resident occurs, the credit allowed by this section shall be determined in a manner consistent with ORS (6) For purposes of this section, an individual s practice shall be determined on the basis of actual time spent in practice each week in hours or days, whichever is considered by the Office of Rural Health to be more appropriate. In the case of a shareholder of a corporation or a member of a partnership, only the time of the individual shareholder or partner shall be considered and the full amount of the credit shall be allowed to each shareholder or partner who qualifies in an individual capacity. (7) As used in this section: [(a) Type A hospital, type B hospital and type C hospital have the meaning for those terms provided in ORS ] (a) Qualified metropolitan statistical area means only those counties of a metropolitan statistical area that are located in Oregon if the largest city within the metropolitan statistical area is located in Oregon. (b) Rural critical access hospital means a facility that meets the criteria set forth in 42 U.S.C. 1395i-4 (c)(2)(b) and that has been designated a critical access hospital by the Office of Rural Health and the Oregon Health Authority. (c) Type A hospital, type B hospital and type C hospital have the meaning for those terms provided in ORS SECTION 7b. The amendments to ORS by section 7a of this 2015 Act apply to tax years beginning on or after January 1, SECTION 8. ORS , , and are repealed. SECTION 9. ORS , , , , , , , and are repealed. SECTION 10. Section 3 of this 2015 Act is repealed on January 2, SECTION 11. Sections 1, 2 and 13 of this 2015 Act and the amendments to ORS by section 6 of this 2015 Act become operative on January 1, SECTION 12. The repeal of ORS , , , , , , , and by section 9 of this 2015 Act becomes operative January 2, SECTION 13. (1) Service agreements under ORS and that are in effect on the operative date of this section shall remain in effect for the term specified in the agreement. (2) Individuals participating in the primary care provider loan repayment program on the operative date of this section shall continue to participate for the duration of the term of the individual s commitment made pursuant to ORS (3) Nothing in the repeal of ORS , and relieves a person of a liability, duty or obligation accruing under or with respect to ORS , and Payments made by participants to discharge an obligation arising under ORS (6) or (7), (2)(e) or shall be deposited to the Health Care Provider Incentive Fund established in section 1 of this 2015 Act. (4) The duties, rights and obligations of the Office of Rural Health under ORS are transferred to the Oregon Health Authority. (5) Any unexpended balances of moneys in the Primary Health Care Loan Forgiveness Program Fund are transferred to the Health Care Provider Incentive Fund established under section 1 of this 2015 Act and shall be used by the Oregon Health Authority to carry out section 2 of this 2015 Act and to administer the service agreements entered into pursuant to ORS that remain in effect under subsection (1) of this section. SECTION 14. The Office of Rural Health and the Oregon Health Authority shall take any actions before January 1, 2018, that are necessary in order to carry out the provisions of section 13 of this 2015 Act on and after January 1, SECTION 15. This 2015 Act takes effect on the 91st day after the date on which the 2015 regular session of the Seventy-eighth Legislative Assembly adjourns sine die. Enrolled House Bill 3396 (HB 3396-C) Page 5

6 Passed by House July 1, 2015 Repassed by House July 6, 2015 Received by Governor:...M.,..., 2015 Approved: Timothy G. Sekerak, Chief Clerk of House...M.,..., 2015 Tina Kotek, Speaker of House Passed by Senate July 6, 2015 Kate Brown, Governor Filed in Office of Secretary of State:...M.,..., 2015 Peter Courtney, President of Senate Jeanne P. Atkins, Secretary of State Enrolled House Bill 3396 (HB 3396-C) Page 6

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